How a Price Increase at Coal India Will Affect Consumers
Energy is beating the whole industry when it comes to commodities. Consumers should expect to spend 12 to 18 paisa per unit as a result of Coal India’s 8% price increase on its high-grade coal.
After five years, Coal India raised the price of high-grade coal, mostly in two sectors: the first, the power, fertiliser, and military industries. Companies employing non-cooking coal are likely to experience the opposite price increase effect.
After five years, this walk was finally completed. There was no price increase, not even during the height of the Covid-19 epidemic or during the conflict between the Ukraine and Russia in September 2022, when the price per tonne reached 145 dollars. But now that the costs have dropped to $100 a tonne, the firms have been forced to implement this increase primarily because their personnel costs or wage costs have gone up by Rs 6000 crore.
The result
The price rise by Coal India will aid in offsetting its rising labour costs. Cost pressure from this increase will be felt by high-grade coal-using businesses.
Increase in power rates of 12 to 18 pesos per plant using high-grade coal. Since most power plants in India don’t utilise particularly high-grade coal, the cascading effect on electricity rates will mostly only affect the facilities that use high-grade coal.
General elections make it unlikely that prices will increase very soon, although sectors like steel and fertilisers that use steam coal or thermal coal might be significantly impacted and see price increases.
